Commons Speaker Michael Martin faced a new crisis last night after his office was caught out lying to The Mail on Sunday over his wife's expenses.

Pressure on Mr Martin to step down grew following the sudden resignation yesterday of his £2,000-a-day official spokesman, respected former Whitehall mandarin Mike Granatt.

Mr Granatt quit after admitting that the Speaker's office had not told the truth about £4,000 worth of taxpayer-funded taxi rides Mr Martin's wife Mary took to go shopping.

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Under fire: Michael Martin, left, faced fresh controversy after his aide Mike Granatt resigned after misleading the press about the expenses of Mary Martin, right

But Labour MPs spoke out in defence of Mr Martin.

Today leading Scottish Labour politician Lord George Foulkes - an MSP for the Lothians region and also a member of the House of Lords - branded the allegations against the Speaker as a "lot of unsubstantiated smear and innuendo".

Speaking on BBC Scotland's Politics Show Lord Foulkes said: "I've been reading a lot of the acres of news coverage about the Speaker's expenses today and there is nothing illegal or improper alleged in any of them. "It's a lot of unsubstantiated smear and innuendo."

Lord Foulkes, a former MP, claimed it was part of a campaign started a number of years ago by "people who went to private schools and Oxbridge who didn't like someone from a working class background in Glasgow getting into the highest office in the land".

And he said: "The Speaker is one of the top offices of state in this country.

"He needs to be looked after properly, he needs to be treated properly and the denigration that is going on not only demeans the people that are doing it, but it undermines the whole democratic system that we have."

The row exploded yesterday after Speaker's office claimed Mrs had been accompanied by an official to get food for receptions hosted by the Speaker.

In fact, the "official" was Mrs Martin's cleaner, Gloria Hawkes, a friend. And the shopping was not for receptions but for informal occasions.

After confirming The Mail on Sunday's accurate version of events yesterday afternoon, Mr Granatt, hired from the private sector by the House of Commons Commission, which is chaired by Mr Martin, vented his fury with the Speaker, apologised to this newspaper – and resigned.

And he issued a devastating statement saying he and his company refused to be associated with the lack of ethics in the Speaker's department.

"I have found it no longer possible to work as the media adviser to the House of Commons Commission, and I have informed Mr Speaker that I am stepping down immediately," he said.

"It is core to the ethical code by which I and my company operate that I tell the truth, and that I am given the truth to tell.

"However, I learned on Friday that I had been led to mislead journalists over material facts in a story concerning the Speaker's household and the use of taxis.

"I have expressed my regrets to the [Mail on Sunday] journalist who brought this to my attention, and I offer them to anyone else who was similarly misled. I want to make it clear this arose through no fault of the Speaker.

"In the statement I gave to journalists, the obvious implication was that Mrs Martin was accompanied by an administrative official.

"It was in fact the housekeeper who provides domestic support to Speaker's House.

"The statement was approved by people who knew the facts. No one brought this discrepancy to my attention."

The fresh blow to Mr Martin's authority came as this newspaper established that he and his wife have been using a secret limousine service to ferry them around in London and their home town, Glasgow – also at taxpayers' expense.

The Martins use £50,000 S-class Mercedes and Jaguar cars.

Further pressure was heaped on Mr Martin as it emerged that he claimed a second-homes allowance on his constituency house in Glasgow – even though he has no mortgage on it.

It was reported the Speaker, whose London home is his lavish grace-and-favour apartment in the Commons, has claimed more than £75,000 from the Additional Costs Allowance over the past six years.

This usually goes towards mortgages or rent, but can be used for other expenses such as maintenance.

Anti-sleaze campaigner Martin Bell said: "If you live free in a grace-and-favour home, you shouldn't need public help to run your second home. The Speaker should announce his retirement."

Labour leaders rallied around Mr Martin this morning. Home Office minister Tony McNulty said that allegations about MPs' expenses were being thrown around "like confetti".

He said: "I think Michael Martin has been a very good Speaker. The House of Commons has got an inquiry under way, by the Speaker, into all aspects of expenses. The sooner there is a greater transparency the better."

Shadow Home Secretary David Davis said it was inappropriate for a member of a frontbench to comment on the future of Mr Martin.

But he told BBC1's The Andrew Marr show: "Clearly he has got problems. The House of Commons needs to be much more transparent."

Former Foreign Secretary Margaret Beckett told the same programme: "There have been a whole string of nasty stories around Michael Martin. Clearly someone is out to get him. Whether any of it is valid, I can't judge."

Former Home Secretary David Blunkett told Sky News that he had not voted for Mr Martin as Speaker but he had done a "pretty reasonable job" and described stories about him as a "witchhunt".

He called for MPs agitating for the Speaker's resignation to "stand up and be counted".

Senior Labour MPs said that Mr Martin, who earns £137,000 a year, is set to abandon his vow to carry on as Speaker until after the next Election – and "pre-announce" in the next few months that he will stand down earlier.

The latest row over the Martins' expenses started when The Mail on Sunday was informed late last year that Mrs Martin regularly used taxis for shopping trips and charged it to her husband's office.

When the Speaker's office refused to comment, this newspaper tabled questions using the Freedom of Information Act.

In December, the reply stated that Mrs Martin had claimed a total of £4,280 for taxi trips since May 2004, about £1,000 a year.

With hindsight, it would appear that the Speaker – or his office – launched a cover-up to conceal the genuine nature of the trips, with Mr Granatt the unwitting fall-guy who had to protect Mrs Martin.

Mr Granatt's Luther Pendragon firm was hired by the Speaker in 2005 for one day a month at a cost of £25,000 a year to handle public relations for the House of Commons Commission, in addition to dealing with Press queries at other times.

One of 58-year-old Mr Granatt's key tasks was to improve the poor image of the Speaker.

The ex-mandarin was picked because of his excellent reputation as a Whitehall Press officer.

As Director of the Information and Communications Service under Tony Blair, he advised Downing Street on media handling of terror threats after 9/11.

Mr Granatt had consulted the Speaker's office before issuing a statement which said Mrs Martin's trips were "entirely in connection with household expenditure that supports the Speaker's duties".

He went on: "She goes shopping for food and so on for entertaining official visitors. The Speaker entertains periodically. There is a budget that is held for the Speaker's office and the money comes from that."

Crucially, the statement, which was approved by the Speaker's office following discussions with Mr Martin, added: "She is always accompanied by an official from the Speaker's office in this task."

It was clearly meant to create the impression that the trips were to obtain provisions for official receptions hosted by her husband.

To reinforce his point, Mr Granatt said Mrs Martin was often required to act as a hostess at dinners in honour of foreign speakers.

But, as Mr Granatt discovered to his astonishment yesterday, it was not a true picture. Outraged staff who work closely with Mr Martin said the statement was "a work of fiction".

They insisted the trips had nothing to do with official functions and the 'official' who accompanied Mrs Martin was her cleaner Gloria Hawkes, who is in her 50s.

"The Commons catering service does all the entertaining for the Speaker," said one.

"The idea that Mrs Martin gets the canapes and drinks from Waitrose is laughable – and untrue.

"The taxis are used for the same shopping trips that millions of other women do at their own expense. The cleaner has become one of the Martins' closest friends. She and Mary get on like a house on fire."

The Speaker hosted six banquets last year, all laid on by Commons caterers and paid for from his £45,000-a-year entertaining budget.

When The Mail on Sunday first challenged Mr Granatt's official account of the shopping trips on Friday, he was indignant at the suggestion that he had not told the truth.

He contacted the Speaker and his advisers and was involved in heated discussions over the next 12 hours as they finally told him the truth.

A source said: "Mike does not like being lied to and did not mince his words – he was bloody livid."

Yesterday afternoon, he resigned – even though he was 7,000 miles away in Singapore.

Mr Granatt went out of his way not to blame Mr Martin personally, but sources close to Mr Granatt said he felt bitterly let down.

"Mike liked the Speaker and is angry he has been betrayed. He cannot believe anyone could be so stupid as to lie to him or the media. The biggest loser in this is not Mike but the Speaker."

Attacks on Mr Martin, dubbed "Gorbals Mick" for his Glasgow roots as a sheet-metal worker, have intensified since the recent row over MPs' expenses.

In October it emerged that he had spent £21,000 of taxpayers' money on Carter Ruck libel lawyers in an attempt to fend off media criticism.

Parliament's sleaze watchdog John Lyon is to investigate claims that Mr Martin used Air Miles from taxpayer-funded flights to obtain seven business-class flights worth more than £3,000 for relatives.

One Minister said: "If Mr Martin announces that he does not intend to carry on after the next Election it will take the sting out of the cries for his head. Then he can retire gracefully to the Lords. Otherwise it could be messy."

In addition, Mrs Martin is said to be fed-up with the constant criticism.

"If Mary says she has had enough, he will go," said one Labour MP. "She is the one who dishes out orders in the Speaker's house."

Mr Granatt has been replaced on a temporary basis by Liz Parratt, who is also media and communications adviser to the Commons.

Asked if Mr Martin had lied to Mr Granatt, she said: "Mr Martin has no further comment to make."